View:
United States securities and exchange commission logo
April 2, 2024
Haimei Wu
Chief Executive Officer
Baird Medical Investment Holdings Limited
Room 202, 2/F, Baide Building, Building 11, No.15
Rongtong Street, Yuexiu District, Guangzhou, People's Republic of China
Re: Baird Medical
Investment Holdings Limited
Amendment No. 3 to
Registration Statement on Form F-4
Filed March 18,
2024
File No. 333-274114
Dear Haimei Wu:
We have reviewed your amended registration statement and have the
following
comments.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe a comment applies to your
facts and circumstances
or do not believe an amendment is appropriate, please tell us why in
your response.
After reviewing any amendment to your registration statement and
the information you
provide in response to this letter, we may have additional comments.
Unless we note otherwise,
any references to prior comments are to comments in our February 6, 2024
letter.
Registration Statement on Form F-4/A Filed March 18, 2024
Risk Factor Summary, page 14
1. We note your revised
disclosure in response to prior comment 1, which we reissue in part.
For each risk factor
listed on page 16 describing the significant regulatory, liquidity, and
enforcement risks
arising from the legal and regulatory system in China, revise to include
specific
cross-references to the more detailed discussion of each of the relevant risks
in
the prospectus,
consistent with the guidance in our Sample Letter to China-Based
Companies issued on
December 20, 2021, and our Sample Letter to Companies Regarding
China-Specific
Disclosures issued on July 17, 2023.
Unaudited Pro Forma Condensed Combined Financial Information, page 69
2. We note your response
to comment 4. For adjustment (n) on your pro forma balance
sheet, please clarify
why the adjustment amount is different than the amount reflected on
Haimei Wu
FirstName LastNameHaimei Wu Limited
Baird Medical Investment Holdings
Comapany
April NameBaird Medical Investment Holdings Limited
2, 2024
April 22, 2024 Page 2
Page
FirstName LastName
your pro forma income statement as part of adjustment (bb).
3. Please update the pro forma financial information provided to included
a pro forma
balance sheet as of December 31, 2023 as well as a pro forma statement
of operations for
the year ended December 31, 2023. Please also include updated
financial statements for
the Registrant and for Tycoon Choice Global Limited in the amended
filing.
4. We note your response to comment 5. We acknowledge your analysis that
the stock price
and change of control provisions are exercise contingencies that do
not preclude the
Sponsor Earnouts from being considered indexed to the entity s own
stock (Step 1).
However, given the Sponsor Earnout Shares can only result in the
issuance of zero shares
or a fixed number of shares, it is unclear how you concluded that the
settlement amount
would not equal the difference between the fair value of a fixed
number of the entity s
equity shares (1,350,000) and a fixed strike price ($12.50) in the
Step 2 test outlined in
ASC 815-40-15-7C. Accordingly, it appears that this arrangement should
be accounted for
as an equity instrument instead of as a liability. Please refer to ASC
815-40-55-27, and
advise, or revise your presentation accordingly.
5. It appears that the pro forma adjustments for the Sponsor earnout may
be double counted.
Specifically, you present a $13,241 credit to liabilities, a $13,241
debit to additional paid-
in capital, and a $13,241 debit to Contingent earnout Sponsor expense.
Please revise.
Comparative Share Information, page 84
6. We note your response to comment 6. The equivalent pro forma per share
amounts
should be presented in addition to the pro forma per share amounts
which should be the
same amounts as presented in your pro forma financial information
beginning on page 69.
In regards to the exchange ratio, we remind you it should be based on
the number of
shares of the new combined entity that each share of the acquired
company is being
exchanged for pursuant to Item 3(f) of Part I.A of the Form F-4.
Risk Factors
Baird Medical's forecasts and projections (particularly those related to the
size of the market,
target populations for Baird Medical's, page 100
7. Please update this risk factor to disclose that the 2023 preliminary
results for Baird
Medical would not meet the 2023 results indicated in the Unaudited
Baird Medical
Prospective Financial Information and revised projections were
prepared.
U.S. regulatory authorities, including the SEC, have recently enacted and
proposed..., page 136
8. We refer to your disclosure in your extension proxy filed on March 11,
2024 that you
initiated the process of liquidating the U.S. government treasury
obligations or money
market funds held in the Trust Account into cash in an interest
bearing account on October
26, 2023. You disclose on page 137 that you will instruct the trustee
to liquidate your U.S.
government treasury obligations or money market funds prior to the 24
month anniversary
Haimei Wu
FirstName LastNameHaimei Wu Limited
Baird Medical Investment Holdings
Comapany
April NameBaird Medical Investment Holdings Limited
2, 2024
April 32, 2024 Page 3
Page
FirstName LastName
of the effective date of the registration statement and to hold all
funds in the trust account
in cash in an interest bearing account. Please revise your disclosure
here and elsewhere in
the prospectus to clarify, if true, that you initiated the process of
liquidating the assets held
in the Trust Account on October 26, 2023 and that the assets in the
Trust Account have
already been moved into cash in a deposit account at a bank. We refer
to your disclosure
on pages F-80 and F-94.
Background of the Business Combination, page 191
9. We note your revised disclosure in response to prior comment 7
relating to changes to the
assumptions underlying the revised projections. With respect to the
first bullet point on
page 197, please revise to further clarify the impact of revised
underlying assumptions
with respect to the projections. For example, revise to further
specifically explain how
your projections changed taking into account the tier market strategy.
In addition, you
disclose in the second bullet point that expenses as a percentage of
sales and marketing
revenue were increased from 9% to 10% in the revised projections.
Please revise to
explain the reason for this change to help investors better understand
the reasonableness of
the assumptions underlying the projections.
10. You disclose on page 213 that from February 18, 2024 to February 26,
2024,
representatives of ExcelFin, including Brian Sun, Max Moskovitz and
Ken Wu, and
representative from Baird Medical, including Chris Ng, Haimei Wu,
Wenyuan Wu, Ted
Wu and Eric Fang conducted an in-depth analysis of historical sales
and revised 2024
projection based on a multi-year trend analysis of hospital usage and
year end inventory.
Based on this analysis, you further disclose that for 2024 MWA needle
sales, (i) the MWA
needles used by hospitals end users to is projected to grow from
51,072 in 2023 to 58,072
in 2024, reflecting a net increase of 7,000, or a 13.7% increase, and
(ii) the 2024 year end
needles purchased-yet-unused by hospitals and distributor would
normalize to
approximately 9,000, resulting in approximately 2,000 new needle
purchases for the year.
In light of the preliminary 2023 results, please revise to disclose
the multi-year trend
analysis of hospital usage and provide a reasonable basis for the
projected needle sales
growth from 51,072 in 2023 to 58,072 in 2024.
Financial Summary of Revised Results, page 208
11. For the medical device focused companies charts on pages 209-212,
please revise to
include a brief narrative to describe each respective chart.
12. Please explain why a number of comparable companies included in the
charts on pages
209-212 differ from the comparable companies listed on page 219.
Opinion of Financial Advisor to the ExcelFin Board, page 214
13. We note the disclosure that Houlihan Capital reviewed, among other
things, projected US
revenue for Baird Medical for the calendar years ended 2024 through
2030. Please revise
to clarify whether management provided the revenue projections to
Houlihan Capital and
Haimei Wu
Baird Medical Investment Holdings Limited
April 2, 2024
Page 4
disclose the information reviewed which informed Houlihan Capita's
fairness opinion.
Expand our Presence in Foreign and Emerging Markets, page 275
14. Please revise to update your disclosures in regard to your recent
developments, including
your plans to (i) complete the ethics review of the breast lump clinical
trials by March
2024, (ii) execute the clinical research contracts with the relevant
research collaborators
and/or the hospital institutions to carry out the specific tasks of the
clinical research, and
(iii) have each of the hospital institutions start the clinical trials
stage by enrolling research
participants and performing medical diagnoses.
Note 4. Accounts Receivable, Net, page F-28
15. We note your response to comment 21. As previously noted, your
disclosures on page F-
28 indicate that all of the accounts receivable are expected to be
recovered within one
year. Of the $25 million in accounts receivable at December 31, 2022, you
collected only
$18.3 million in one year. We continue to have difficulty understanding
how you
determined your allowance of $.6 million was adequate given that it
appears
approximately 28% of your accounts receivable balance is not recovered
for more than a
year (approximately $7 million). Please further explain and address the
following:
Please tell us how much of your accounts receivable balance as of
December 31,
2022 has subsequently been collected through March 31, 2024 or the
latest date as of
which this data is available; and
Of the remaining unrecovered balances as of December 31, 2022, please
address how
much was from the two publicly listed companies in China you
identified in your
response. Please tell us whether you have been in communications with
these two
customers, when you expect repayment, as well as the last time you
received any
payment from them.
Please contact Nudrat Salik at 202-551-3692 or Al Pavot at 202-551-3738
if you have
questions regarding comments on the financial statements and related matters.
Please contact
Jane Park at 202-551-7439 or Lauren Nguyen at 202-551-3642 with any other
questions.
Sincerely,
FirstName LastNameHaimei Wu Division of Corporation
Finance
Office of Industrial
Applications and
Comapany NameBaird Medical Investment Holdings Limited
Services
April 2, 2024 Page 4
cc: Stephen Leitzell, Esq.
FirstName LastName